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Governor Rell’s proposed two-year budget closes a projected $6 billion hole over the next two years by consolidating state agencies and raising fees, but does not raise taxes. As WNPR’s Anna Sale reports, legislative leaders worry about some of the proposed cuts and say the deficit could be more than $2 billion more.

Rell’s budget relies heavily on concessions from state employee unions, and cuts 400 jobs and another 448 unfilled positions.

“There is pain, there is sacrifice. And there is some long overdue trimming. Simply put, the bloat of bureaucracy is no longer affordable.”

Ten state agencies under the knife include things like the Permanent Commission on the Status on Women and the African American Affairs Commission. The Offices of the Health Care Advocate and Consumer Counsel would also be cut.

“In times of plenty they are helpful. In times such as these they are unaffordable.”

To bring in more money to state coffers, Rell’s budget proposes higher fees on state licenses and permits, but not higher taxes.

“People cannot afford their taxes now. We should not add to their burdens.”

Some of the fee increases, though, could be substantial. Her budget calls for state licenses, permits and fees under $150 to be doubled, though that doesn’t include Department of Motor Vehicle fees. Those will go up but more modestly. Altogether, higher fees would bring in an additional $100 million next year.

And while municipal and education grants will stay flat, the governor’s budget provides incentives for towns to work together and regionalize services.

“It’s time regionalization was more than something we talk about. It’s time for it to be a reality.”

Overall, while the governor warned of pain, the situation would be a lot more painful without the pad of federal stimulus money. It counts on more than $2 billion of new federal money over three years.

Robert Genuario is her budget director.

“Candidly, this year you can’t talk about revenue without talking about the federal stimulus package. It is significant and it is generous.”

Of course, it is also not yet passed, and Genuario conceded that some of the governor’s projections may change depending on the bill’s final language.

And even with this variable in flux, Senate President Don Williams isn’t sure Rell’s budget accurately reflects the challenges facing the state. He’s troubled that her budget only closes a 6 billion dollar hole, while the state’s independent Office of Fiscal Analysis is projecting around an $8 billion deficit.

“It’s a budget proposal that will have to be amended, because we know that the bottom line is not going to be consistent with the real deficit numbers.”

Williams says he has asked the governor to prepare a supplemental budget to reflect the new, deeper deficit numbers.

On the House side, Speaker Chris Donovan’s objections fell more along ideological lines.

Donovan flagged measures in Rell’s budget that she didn’t mention in her speech, including some increases in premiums and copays for low-income adults insured through the state’s Husky programs. He’s also concerned about a five percent cut to higher education and the elimination of state aid for drugs for seniors.

“It seems the burden is particularly on senior citizens, low-income residents without health care, the disabled, and college kids. And they really are taking the hit, and they are the most vulnerable in our population, so I would like to see that shift.”

And Rell will need the support of both Donovan and Williams to get her proposals through. Democrats have a veto-proof majority in both houses.

She will also need the help of state employee unions. Her budget calls for $290 million in wage and benefit concessions and suspension of binding arbitration for two years.

For now, state employee unions are nowhere close to signing on.

Larry Dorman is spokesman for AFSCME Council 4.

“We understand the urgency because we’re in a national economic crisis and a state economic crisis. But we’re not going to be part of a solution that destroys public services and that makes the economic crisis worse. We can’t do that.”

How that reality impacts the governor's budget will be determined at the negotiating table. State employee unions are scheduled to meet with the governor four more times this month, starting next Tuesday.